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There is talk in economic circles that due to high energy and insurance costs, foreign competition, outsourcing, etc, the amount we pay people to do many jobs has to change. Wages have to go down.
You have seen this already in many blue collar environments, factories, and airlines, Circuit City, Radio Shack, etc. They tell the workers that they can not continue to make the type of money they have. Either is is termination or a wage cut or freeze.
Alot of our jobs could be outsourced, or as unemployment goes up, new employees could do the work for far less. Why should we pay an aging tired 20 year company veteran (such as an Administrative Assistant) 50K a year when we could find an eagar younger worker $30K?
We are cutting your pay 40% tommorrow, stay or go? If you stay while you are looking for another job you have to work just as hard or harder than you did when your pay was 40% more! YOUR CHOICE?
I would leave. Workers already earn little the way it is (although, and this is really funny, CEOs and other top management are raking in record dollars), and if I'm not valued as a worker, my work will certainly show it (you pay me less, and I'll certainly do less work, and my quality will drop like a rock). I'm surprised there isn't talk in economic circles that because of high energy costs, high food costs, and a rising cost of living, that wages need to come UP for the majority of positions.
But it all goes back to that old addage, you get what you pay for.
Inflation: "a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency" from Dictionary dot com.
It seems you're both right, when you think about it.
Used to be, when countries had much more insular economies, inflation was largely an internally-caused condition. Now, when countries' economies are tied so much to each others' exports and imports, manufacturing capabilities and wages, agricultural growing capabilities, climates, political situations, and treaties, inflation becomes a condition influenced from all points of the compass, no?
huh? Dolalr devaluation is a causual factor in inflation, not inflation itself. In today's market we do have an increase in gas (caused by dollar devaluation somewhat, but by other factors as well) which is causing increases in other areas that involve transportation. I think the inflation rates otherwise are within norms.
It's like saying because one has sex then one is pregnant. Well it's llike this...there is a little swiming thing that has to go to an ovulating egg....One can cause the other.
Man do I hate going to these forums only to have to teach macroeconomics 101.
Alforcats no argument with you. If we want to steer the topic in that direction then we can remember that dollar devaluation has positive effects on exports from a country and can (again a causual effect) stimulate an economies production. Also most argue about the dollar vs. euro and that is where our dollar is devalued. Other currencies are suffering as well.
Inflation: "a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency" from Dictionary dot com.
It seems you're both right, when you think about it.
Used to be, when countries had much more insular economies, inflation was largely an internally-caused condition. Now, when countries' economies are tied so much to each others' exports and imports, manufacturing capabilities and wages, agricultural growing capabilities, climates, political situations, and treaties, inflation becomes a condition influenced from all points of the compass, no?
Big difference is in the Good Old Days, the countries tended to merchant model economies. At the end of the day, week, year, whatever, they tried to profitable.
Successful countries still do this. China, Japan -- all the top economic countries. US went in the ditch when we started listening to a bunch of idiot MBAs would studied some circle-jerk Globalony Economy nonsense and decided that the US did not have to be profitable anymore.
That was the stunning stupidity of debt-based business and "Reagonomics," which has been continued and ramped up under every con-man that has held the job since Reagan.
However, the MBA-class that sold this crap to the US did that under a structure where they themselves and their corporations would STILL be profitable. They just dumped the losses on US. In short, the US public is a pack of total freaking idiots and fools and about to [continue to] suffer the fate of all fools.
Well if our economies are so interconnected, then why aren't other countries feeling the effects of our economic woes? I'm not disputing that we have a global economy. I'm just wondering why we're not seeing a domino effect? Is it simply the fact that the hardest news hits closest to home?
Intertesting article, actually I agreed probably too much with the previous posters argument that dollar devaluation was related to inflation. Other economists disagree:
Recent Macro Evidence: Pass-Through To Consumer Prices
According to popular tradition, one particularly harmful affect of a depreciating dollar is the prospect of an uptick in consumer price inflation... Yet, just how much truth is there to the phrase “a depreciating currency spurs domestic inflation?” According to some new evidence, the correlation between a depreciating currency and domestic inflation is low and falling.
huh? Dolalr devaluation is a causual factor in inflation, not inflation itself. In today's market we do have an increase in gas (caused by dollar devaluation somewhat, but by other factors as well) which is causing increases in other areas that involve transportation. I think the inflation rates otherwise are within norms.
It's like saying because one has sex then one is pregnant. Well it's llike this...there is a little swiming thing that has to go to an ovulating egg....One can cause the other.
Man do I hate going to these forums only to have to teach macroeconomics 101.
Alforcats no argument with you. If we want to steer the topic in that direction then we can remember that dollar devaluation has positive effects on exports from a country and can (again a causual effect) stimulate an economies production. Also most argue about the dollar vs. euro and that is where our dollar is devalued. Other currencies are suffering as well.
thanks for the macro lesson. real demand is being driven partially by increased consumption in developing nations and mostly because developing nations with massive dollar exposure are stockpiling oil. i am quite aware of what is going on in the world but it annoys me when clowns downplay the effects of irresponsible monetary policy
Intertesting article, actually I agreed probably too much with the previous posters argument that dollar devaluation was related to inflation. Other economists disagree:
Recent Macro Evidence: Pass-Through To Consumer Prices
According to popular tradition, one particularly harmful affect of a depreciating dollar is the prospect of an uptick in consumer price inflation... Yet, just how much truth is there to the phrase “a depreciating currency spurs domestic inflation?” According to some new evidence, the correlation between a depreciating currency and domestic inflation is low and falling.
what a load of horse manure! i think these guys fail to take into account chinese currency manipulation which has kept us stocked up on cheap for so long. now that they are flush with our paper, enough to pull every last commodity out of the ground and into beijing warehouses, we are going to see 20 years of pent-up inflation overnight! obviously imo
Doesn't unemployment pay something like 60% of your wages if you're 'let go'?
Also, consider the costs of medical insurance coverage (something you NEVER want to be without). COBRA is stupid expensive, but if you have a spouse that you can be on the health plan, then your best option would be for immediate termination.
That way, you get paid to search for a job and not have to work for the company that forced you into that position.
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